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How are these valuations calculated? For example, Instagram has an estimated value of ~$4.6 Billion, but it's actual value (based on purchase by FB) is ~$1 Bil
by mashmac2 13y ago
How are these valuations calculated?
For example, Instagram has an estimated value of ~$4.6 Billion, but it's actual value (based on purchase by FB) is ~$1 Billion. The page doesn't provide a clear link on how they estimated the valuations, either...
Edit:
If you click on one of them, then mouse-over the valuation on that page, if offers the following explanation:
"To calculate App Worth, we take into account many factors and metrics:
- User Estimates
- User Activity
- International Reach
- Revenue Estimates
- Sensor Tower Secret Sauce™"
- megablast 13y agoNot sure why this is secret. A formula would be useful, but I guess this is just a fun estimate.
- diziet 13y agoPart of the reason for that is that I didn't want people gaming the algorithm. The things it looks at are user numbers, revenue estimates (very good here~) and internationalization when computing the worth.
- blowski 13y agoSome of the valuations raise a bit of an eyebrow - e.g. BatteryHD valued at nearly $41M. * In the case of apps that are native versions of web services (e.g. Flickr, Twitter) it's impossible to separate the value of the app from the service, so is your valuation of the whole service? * How do you factor in possible future growth, based on potential size of market, current market saturation, and possible revenue streams? It seems like they would be very difficult to automate. So the valuation of the app-maker is probably more interesting than the value of the app itself. A company that has made one very successful app is more likely to make other successful apps, because of branding and experience.
- scholia 13y agoInstagram was presumably worth $1 billion when Facebook bought it 16 months ago. That doesn't tell you what it would be worth today.